The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

Sydney factory fire contained

Emergency services were called to the fire on Rich Street in Marrickville about 3.30pm (AEDT) on Tuesday.

A spokeswoman from Ambulance NSW said eight people had been treated for minor smoke inhalation at the scene, with two of those taken to Royal Prince Alfred Hospital after inhaling the fumes from burning lacquer.

The patients were in a stable condition, but no further details were known, she told AAP.

Superintendent Tom Cooper said the blaze was "well alight" when fire crews arrived and had engulfed the roof, with officers from 10 surrounding stations helping fight the flames.

A Fire and Rescue spokesman said crews would remain at the scene all night in case the blaze reignited.